One advantage of using factors as a source of shortterm financing is that the firm is able to save money by eliminating its own collection department.

Question

One advantage of using factors as a source of short­term financing is that the firm is able to save money by eliminating its own collection department.

Quizplus · Accepted Answer

Factoring involves selling accounts receivable to a third-party company, which takes responsibility for collecting payment from customers. This means that the firm no longer needs to maintain its own collection department, resulting in cost savings.

One Advantage of Using Factors as a Source of Short­term

One Advantage of Using Factors as a Source of Shortterm